Oecd - Korea needs to keep increasing aid flows in line with its ambitions

A success story of international development itself, Korea is now a driving force in global aid, focusing on the neediest countries and shaping strategy by sharing its experience and bridging the gap between rich and poor countries. Korea will have even greater impact if it can produce a clear plan to increase aid volumes in line with its stated ambitions, according to a new OECD Review. The latestDAC Peer Review of Koreanotes a steady rise in

Korean aid – from USD 1.2 billion to USD 2.25 billion – in the six years since the former recipient country joined the OECD Development Assistance Committee (DAC) as a donor in 2010. Globally, Korea focuses on inclusive growth, crisis prevention and development effectiveness, while in developing countries, its support includes highly concessional loans for national priorities such as renewable energy and roads. Korea is also well focused on countries most in need, with 54% of its bilateral aid going to land-locked, small island or fragile states. The top five recipients of Korean aid in 2015 were Viet Nam, Tanzania, Cambodia, Bangladesh and Afghanistan. Korea also sends large volumes of private investment, non-concessional lending and remittances to poor countries. That said, a slowing economy prompted Korea to trim its 2020 target for official development assistance (ODA) to 0.20% of gross national income (GNI) from 0.25% previously and compared to 0.16% today. Korea’s aim is to reach 0.30% of GNI by 2030, but it has not set out a roadmap for achieving this. By comparison, the average ratio of ODA to GNI for DAC donors was 0.32% in 2016, and six DAC members have now reached a UN target of 0.7%. “Setting out a clear plan and a detailed timeline to increase aid flows over the next decade would help Korea’s officials and development partners in their planning and could prevent what may look like a diminished level of ambition affecting Korea’s ability to meet its international commitments,” said DAC Chair Charlotte Petri Gornitzka, presenting the Review in Seoul. “Korea puts more focus than the average donor on supporting the least developed countries, but it also needs to plan for ODA growth.” Korea provided USD 2.25 billion in net ODA in 2016 (0.16% of GNI), up from USD 1.92 billion (0.14% of GNI) in 2015. This does not include the bilateral assistance Korea provides to the Democratic People’s Republic of Korea. If Korea’s economy continues to grow at current rates, it would need to provide net ODA of USD 3.2 billion in 2020 to meet its 0.20% target – a jump of 40% from 2016 levels. While Korea has made progress in removing conditions tying its aid to Korean companies, the Review points to some backtracking of late and stresses the need to untie aid to the maximum extent possible. In other areas, the Review finds Korea fully implemented eight and partially implemented 13 out of 24 recommendations in its first Peer Review in 2012. Each DAC member is reviewed every five years in order to monitor its performance, hold it accountable for past commitments and recommend improvements. Reviews use input from officials in the Review country and partner countries – Cambodia for this Review – as well as civil society and the private sector.